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Advisor concerns over market volatility jump dramatically

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Advisor concerns over market volatility jump dramatically

Survey finds advisors focused on helping clients manage sharp, sustained rise in volatility.

Volatile markets continue to weigh heavily on the minds of financial advisors, according to the most recent Advisor Top-of-Mind Index survey conducted by investment management firm Eaton Vance. Volatility surged to 122.3 on the ATOMIX index, the highest survey rating ever and a significant rise from its Q3 rating.

More than half (55%) of financial advisors said protecting client wealth from volatility increased in importance over the last 12 months.

"Volatility's unpredictability has made investors uncomfortable in the current market environment and reduced confidence in their ability to reach their goals," said John Moninger, managing director at Eaton Vance. "Despite their own rising concerns, we believe advisors are doing their best to help their clients navigate increasing volatility by staying calm, focused and opportunistic."

"History has shown that the best opportunities tend to present themselves when uncertainty is running high."

Advisors also are divided over what recent volatility means for markets going forward. Thirty-nine percent said it is somewhat likely to lead to an equity bear market. Sixteen percent said it most likely will, while 38% said a bear market is not likely at all. Advisor age is a distinguishing factor, as 50% of advisors from the baby boomer generation believe in the likelihood of a bear market, while 61% of advisors from younger generations share the same sentiment.

Edward Perkin, Chief Equity Investment Officer at Eaton Vance, views the pickup in volatility as the market's attempt to price uncertainty. "History has shown that the best opportunities tend to present themselves when uncertainty is running high," Mr. Perkin said.

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